In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. Given this, which of the following statements is true?

Question

Quizplus · Accepted Answer

The use of Kent cigarettes as a medium of exchange is an example of commodity money which has value apart from its use as money. Commodity money can be any good or asset that has value in and of itself, such as gold or tobacco. Fiat money, on the other hand, is not backed by any commodity but has value because the government declares it to be legal tender. The statement about fiat money needing to be backed by gold is incorrect.

In Romania Under Communist Party Rule in the 1980s, Kent